The hidden costs to companies of breakdowns in the SAP payment process caused by inaccurate data are highlighted in a white paper issued by BankersAccuity, a division of business-to-business (B2B) publisher Reed Business Information.
The white paper states that throughout the global banking system more than 5,000 changes to critical bank information are made daily. It offers guidance for corporate treasury professionals to help identify the right tools for making the best use of the process.
The costs identified as a result of bad routing data include:
- Production: Broken payments and supply chain delays, which impact revenue.
- Receivables: Impeding the ability to collect receivables via direct debit; this can cause corporations to finance their spending requirements through debt.
- Finance: Impacting time-sensitive securities transactions, such as overnight repo or short-term commercial paper markets, by causing higher interest payments, increased transaction costs and/or liquidity issues.
“Maintaining this data in the bank master table is complex and can require a great deal of effort. It is updated manually or automatically, but in instances when treasury professionals need to enter larger amounts of data, they must use a separate upload programme,” said Robert McKay, managing director at BankersAccuity.
“These complications can generate unnecessary inefficiencies and costs and result in hundreds of thousands or millions of dollars being lost in diminished funding capacity, costly production delays or lost revenue. Companies, therefore, need the best payments data to be easily accessible to them at any given time.”
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
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